Amazon is raising the price of its popular Prime membership after posting record profits in 2021.
The e-commerce giant on Thursday announced it is raising its annual prime membership to $139, up from $119, in the U.S. and is raising its monthly membership fee to $14.99, up from $12.99.
For current Prime members, the increase will start after March 25, while new members will pay the higher price starting Feb. 18.
Amazon says it's raising the price of the membership as it continues to expand benefits for members and as it saw increased costs related to transportation, inflationary pressures and wages amid the tight labor market and the pandemic, which Amazon called "short-term challenges."
This comes as Amazon's revenue rose to a record $137.4 billion in the fourth quarter of 2021, of which $14.3 billion was profits. Amazon CEO Andy Jassy touted in a news release the company's "extraordinary growth" in 2020 that continued in 2021, noting it's seeing a 40% year-over-year growth rate and a $71 billion revenue run rate.
In 2021 as a whole, Amazon's net sales increased 22% to $469.8 billion, up from $386.1 billion in 2020. Its $14.3 billion in profits was primarily the result of an increase of $11.8 billion in the value of its stake in electric vehicle maker Rivian Automotive.
Amazon's underlying operating profits in the 4th Quarter was a still substantial, albeit this is down from $6.9 billion compared to the 4th Quarter of 2020.
“We continue to feel optimistic and excited about the business as we emerge from the pandemic," Jassy said.
Amazon has continued to experience shipping delays — a major perk of a Prime membership is its next-day shipping — with Amazon Chief Financial Officer Brian Olsavsky telling reporters on Thursday "We're not where we want to be," in regards to some Prime-eligible products showing delivery dates up to a week later.
He did say the company is seeing improvements in the number of products available for one-day shipping, though Vox.com notes the pandemic had delayed Amazon's goal of making one-day shipping the Prime delivery standard.
Amazon said in 2021, Prime members received more than six billion free deliveries and more than 200 million members worldwide streamed TV shows and movies on Prime Video.
Amazon last rose the price of its Prime membership in 2018. Back then, it also raised it by $20.